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2024 (5) TMI 1100 - HC - Income TaxUndisclosed investment made to acquire the rights of his sister-in-law in the family property - undisclosed income for the block period - receipt was found by the revenue authorities during search which reflected that sister-in-law has stated that she has received the amount and no further payment is due from the appellant assessee. HELD THAT - Income Tax Appellate Authority has reached to the conclusion that such certificate could not be relied upon as it was apparent that she was trying to support the case of the assessee, who was her brother-in-law. The contention of appellant that she should have been called and her statement should have been recorded is found to be without any basis. Once there is no denial to the receipt, which was found during search and the same is genuine, it would be assumed that the property was handed over after the entire payment was made. There is a demand draft receipt and the remaining amount has been presumed to be paid by the appellant. Such a course adopted by the ITAT cannot be in any manner to be perverse. We are not impressed by appellant for his placing documents to show that subsequently the assessee has also paid to sister-in-law the amount of Rs. 5,00,000/- in different installments from 2003 to 2006, as there is no mention that the amount is being paid in lieu of the remaining amount due i.e. Rs. 5,00,000/-. We also find that the said course adopted is subsequent to the search and findings of the AO. The appeal fails and is dismissed. The order passed by the ITAT is upheld.
Issues involved:
The issue involves the addition of Rs. 5,00,000/- as undisclosed income in the appellant-assessee's case, based on the confirmation filed by the sister-in-law and the subsequent disagreement between the CIT (A) and the ITAT regarding the addition. Details of the Judgment: 1. The appellant argued that the addition of Rs. 5,00,000/- was unjustified as the sister-in-law confirmed the outstanding amount due through receipts and bank statements, which the Income Tax authorities failed to consider. 2. The appellant contended that the Assessing Officer did not conduct any inquiry with the sister-in-law to verify the truth, making the addition perverse. The ITAT set aside the CIT (A) order without sufficient grounds, according to the appellant. 3. The revenue supported the ITAT's decision, stating that it is the final fact-finding authority and should not be interfered with by the Court merely due to differing conclusions. 4. The Court noted that during search operations, the CIT had added Rs. 5,00,000/- as undisclosed investment made by the appellant to acquire rights in the family property, leading to a total undisclosed income of Rs. 55,97,070/- for the block period. 5. The CIT (A) initially set aside the addition based on the sister-in-law's confirmation, but the ITAT disagreed, concluding that the amount had already been paid by the appellant without disclosing the source. 6. A family settlement from 1991 stipulated payments to be made to joint owners of ancestral property, including the sister-in-law. The ITAT found that the sister-in-law had been paid the due amount, based on receipts and possession handover. 7. The ITAT rejected the reliance on a certificate issued by the sister-in-law post-search, as it appeared biased in favor of the appellant. The Court found the ITAT's decision reasonable and not perverse. 8. The appellant's subsequent payments to the sister-in-law were deemed irrelevant as they were made after the search and initial findings by the Assessing Officer. 9. Citing a Supreme Court case, the Court emphasized that the ITAT's findings on facts should not be interfered with unless shown to be perverse, which was not the case here. 10. Consequently, the appeal was dismissed, upholding the ITAT's decision, and all pending applications were also dismissed.
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